Oil declines as investors consider the prospects of US rate cut

Today, Wednesday, oil prices continued the losses they incurred in the previous session in light of growing expectations that the Federal Reserve’s reduction in interest rates will take longer than expected, which overshadowed existing concerns about attacks on shipping in the Red Sea.

According to Reuters, Brent crude futures fell 47 cents, or 0.57%, to $81.87 per barrel by 1034 GMT, while US West Texas Intermediate crude futures fell 48 cents, or 0.62%, to $76.56.

Both crude contracts fell from their highest levels in nearly three weeks on Tuesday, as Brent contracts fell 1.5% and West Texas Intermediate contracts fell 1.4%.

The premium for Brent crude futures contracts for the nearest month of April over September contracts reached its highest level since October 31 on Monday at $3.64 per barrel, although it has declined since then to about $3.37. The premium is a fine for late sales and a sign of scarcity of supply in the market.

Concerns that the Federal Reserve will take longer to lower interest rates than expected have weighed on the outlook for oil demand. US inflation data last week led to a decline in expectations that the Federal Reserve would begin a monetary easing cycle soon, with economists polled by Reuters expecting a cut in interest rates in June.